Does India manage its water like a ‘banana republic?’

Megha Bahree


India’s water supplies might be drying up and the government is finally waking up to that fact. The question remains, though, if its efforts will be sufficient to avert a possible crisis.

India has more than 17% of the world’s population, but has a mere 4% of the world’s renewable water resources and 2.6% of the world’s land area.

New Delhi is finally beginning to realize the precariousness of those statistics. The Ministry of Water Resources earlier this year drafted a national water policy outlining a framework for the country.

Some of the key concerns that the policy raises include:

– Large parts of India have already become water stressed. Rapid growth in demand for water pose serious challenges to water security.

– Access to safe drinking water still continues to be a problem in some areas. Skewed availability of water between different regions and different people in the same regions is iniquitous and has the potential of causing social unrest.

– Groundwater is still perceived as an individual property and is exploited inequitably and without any consideration to its sustainability leading to its over-exploitation in several areas.

– Inter-state, inter-regional disputes in sharing of water hamper the optimum utilization of water.

These are among the issues that will likely be addressed during “India Water Week,” a three-day conference organized by India’s Ministry of Water Resources starting Tuesday.

The water ministry is set to release a set of recommendations based on the draft water policy as early as this week. But what do experts make of the draft so far?

This is a more comprehensive policy than the one currently in place because, in a first, the government is waking up to the fact that water can be depleted, says Sunil Sinha, head and senior economist at Crisil Ltd., a rating agency owned by Standard & Poor’s. Mr. Sinha authored a recent report on how corporate India needs to embrace for an impending water crisis and switch to sustainable water practices.

“Whenever the issue of water has been discussed in the Indian context, most of the discussion was on augmenting the water resources,” says Mr. Sinha. “The conversation always is that the supply doesn’t meet the demand and how do we increase the supply. One good thing about this policy is that it’s recognizing that water is not an unlimited resource.”

Water, the draft says, should be treated as an economic good so as to promote its conservation and efficient us. It needs to be managed as a community resource held, by the state, under a public trust doctrine to achieve food security, livelihood, and equitable and sustainable development for all.

The draft adds that each state should establish a system for a water tariff and have in place a criteria to charge for water. And it acknowledges one of the pet peeves of a lot of planners: a lot of water, and electricity, is wasted because electricity is heavily under priced by several governments and this, it says, needs to be reversed.

But not everyone is impressed.

“It is not the absence of money, expertise or water because of which [Indians] have such a poor service,” says Prof. Asit Biswas, president of the Third World Center for Water Management in Mexico, and a water expert who has been advising governments and companies on their water management for several years. “It is simply bad planning and management. India may be an emerging economic power, but its urban water and wastewater management is akin to that of a banana republic.”

Prof. Biswas says many of the ideas in the new draft were promoted in the previous policy but were never implemented.

“In case of India, the ideological discussion as to who provides the water, public or private sector, is a red herring,” says Prof. Biswas.

Currently less than 1% of India’s population receives water from the private sector. And even under the most optimistic scenario, he says, this number will remain under 10% even by 2030.

“The main question India should be asking is how to improve the dismal performance of the public sector since even in 20 years’ time more than 90% of the Indians will be receiving water from the public sector,” he says.

The country needs to make some tough decisions but lacks the political will, he says. “Equally, unfortunately, the Indian public is so used to a third class water service for generations that it accepts this third-grade service without any complaint.”

Prof. Biswas says the country can start with three immediate changes: replace career bureaucrats who head water utilities with professional, technically knowledgeable managers, who can spend at least six years running the utility so that they have enough time to develop and implement a plan; price all water, and have special tariffs for the poor who shouldn’t pay more than 2% of their household income (“free water is a sure recipe for a third grade delivery service,” he says); remove the excess fat from Indian utilities so that they can turn around to become financially viable.

(To be fair, the draft does say that states should establish a water tariff.)

Crisil’s Mr. Sinha is not as pessimistic about the draft in its current form. He says he is encouraged that the government is realizing that it can’t really increase the supply of water and will have to make more judicious use of water and focus on water wastage. “Here is a lot of movement forward,” he says.

This article was first published by WALL STREET JOURNAL, April 9, 2012.